Global economy forces job cuts

Up to 150,000 British manufacturing
jobs will be lost this year as the world economic downturn forces companies to
slash spending, the Engineering Employers’ Federation warned last week.

The EEF’s quarterly
survey shows that the threatened recession has begun to hit UK producers.

It claims that the
number of job cuts over the next two years will reach 150,000, with 60,000
being lost this year.

The survey is the
latest to point to weaker output and subdued inflationary pressure.

The EEF has revised
its downward forecast for engineering growth this year from 3.5 per cent to 3.2
per cent.

It blames the sharp
slowdown in electronics, caused by weaker US demand and an end to the boom in
Internet communications technology.

Last year engineering
output, which accounts for nearly half of manufacturing, grew by 3.9 per cent.

The EEF has welcomed
the Bank of England’s interest rate cut of 0.25 per cent to 5.5 per cent.
Stephen Radley, the EEF’s chief economist, said, "The cut is the right
response to fragile markets and will give manufacturers’ confidence a welcome
shot in the arm.

"With inflation
remaining under control, manufacturing will look to the Bank to keep a very
close eye in the coming months on the state of the world economy and its impact
on Britain."

"The cut will lessen or prevent a more
serious recession, which in turn will help restrict job losses for the rest of
year."